Project Aqua – New Zealand’s Cheapest Power Option

Project Aqua is the most cost-effective
large-scale electricity generation proposal on the horizon
in New Zealand and would provide a vital boost to the
national grid, helping to ensure security of supply in the
years beyond 2010.

The proposed hydro-electric scheme
involves six power stations being built along a 60-kilometre
canal, which would run down the south side of the lower
Waitaki Valley. It would have the capacity to produce 524
megawatts of electricity which, according to pre-feasibility
studies, would cost 4.5 cents per kilowatt hour (c/kWh).
Project Aqua would generate enough low-cost renewable
electricity, in an average year, to power the equivalent of
375,000 households, or about 250,000 households in a very
dry year (a 1-in-20 year event).

“Project Aqua is a very
important part of the total picture for New Zealand. It
would be renewable energy. The generation from Project Aqua
would not create more CO2,” says Meridian Energy
spokesperson Alan Seay.

Apart from Project Aqua, there is
approximately another 230MW of hydro electricity that could
be developed at a cost of up to 7 c/kWh, in a number of
smaller schemes and existing hydro efficiency enhancements.
Other larger hydro developments would cost approximately 8.5
c/kWh.

“Project Aqua is cheaper because it makes use of
low earth and gravel for canals rather than concrete. It
also utilises existing hydro facilities - Lakes Tekapo,
Pukaki, Benmore, Aviemore and Waitaki – as the scheme’s
storage lakes. Project Aqua is the natural extension of the
existing chain of eight power stations on the Waitaki
River,” says Alan Seay.

Wind power comes at a cost of
between 6.2 and 6.5c/kWh and is another form of energy that
is being utilised by Meridian Energy, which is currently
constructing the biggest wind farm in the country, Project
Te Apiti in the Manawatu.

“It’s fantastic that we’re
starting to utilise wind as another form of renewable
electricity, but we also have to be realistic. The entire
Te Apiti wind farm – with 55 large wind turbines – will only
produce around two-thirds the energy of a single Project
Aqua power station. It complements our hydro generation,
not replaces it.”

Alan Seay says our current supply of
cheap gas is quickly running out, with our existing
gas-fired power stations potentially short of gas within
three years.

Other generation options include Liquefied
Natural Gas, which would cost between 9.3 and 11.6c/kWh, and
could have large safety risks given New Zealand’s seismic
activity. Oil generation also has the drawbacks of high
cost and exposure to international price shocks, as well as
its high sulphur content. All fossil fuel options produce
significant quantities of CO2 emissions.

Coal is a fuel
which is readily available in New Zealand but Alan Seay says
just because it’s available doesn’t mean it is
cheap.

“Power from new North Island coal-fired generation
would currently cost between 8.3 and 9.4c/kWh, and if a
carbon tax is introduced that price would jump by 1.5c/kWh.
Removing the high sulphur content might add another 2 cents
to the kilowatt per hour cost.

“New Zealand has the
ability to have a renewable energy future, which has a
minimal impact on the environment while still providing for
our economic and social development. Project Aqua is
offering us that future…it’s an opportunity we can’t turn
away,” concludes Alan Seay.

In response to the challenges facing Scoop and the media industry we’ve instituted an Ethical Paywall to keep the news freely available to the public.
Organisations whose staff use Scoop at work need to be licensed through a ScoopPro subscription under this new model, these users get access to exclusive news tools.
If you love Scoop you can also support through a monthly donation as a Foundation Supporter.

Thousands of young people will be given the chance to gain valuable qualifications and meaningful work under the Mana in Mahi – Strength in Work scheme launched by Prime Minister Jacinda Ardern today. More>>

The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May Statement. The direction of our next OCR move could be up or down. ... More>>